These days, generating a passive income through real estate offers a great way to increase both your bank account and your investment portfolio. Many different real estate market sectors are available to investors like you to ultimately give you financial freedom. By diversifying your real estate portfolio and spreading your investments across various sectors, you lower the risk of each holding while building a solid hedge against inflation. While single-family home rentals typically come to mind, there are actually many ways to achieve your goal.
First, of course, as with any investment, you must perform due diligence to ensure the highest return for your investment dollar. You should have a team of reliable pros to quickly investigate properties, ensuring that the improvements on the land are solid. Finally, your team needs to provide you with reliable numbers for any updates, repairs, or remodeling required to make your calculations on point before you buy. In this post, we’ll give you some ideas on How to Generate a Passive Income Through Real Estate in Arizona.
Investing in Developed Land
Long-Term Rental
Let’s start with the basics. A classic model for generating passive income is buying and holding an established home or building to attain long-term tenants. By understanding the market and a realistic assessment, purchasing a property within your budget, and proper management, you can count on a reliable income stream as the property appreciates, over time, building wealth.
Vacation Rental
An alternative to long-term tenants generating passive income through real estate in Arizona is that vacation rentals provide short-term tenants with a much higher rental rate per day of occupancy. Be sure that you comply with all local laws regarding this real estate market sector.
Mobile Homes
Mobile homes offer a low-cost option to generate a passive income; if you’re interested in making a more considerable investment, consider buying or even creating the entire park. The residents typically own and are responsible for the upkeep of the mobile homes while you collect monthly lot rent. With a low overhead, maintaining roads and amenities, this sector offers a reasonably easy way to earn passive income.
Commercial
Commercial properties, including residential buildings with more than five units, provide another pathway to generate a passive income through real estate in Phoenix. While this market sector requires a more significant investment, the competition for these properties is much less fierce. There is plenty of room to earn profits on the acquisition when appropriately managed.
But what about generating passive income with vacant land?
Parking Spaces
Where permitted, parking spaces can be rented out in cities or for larger vehicles, such as RVs or trucks, on more extensive tracts of land, as another way to generate a passive income through real estate in Arizona.
Vehicle, Boat or RV Storage
Another way to generate a passive income is to create storage. Some people don’t have room to park all their toys. Some communities won’t allow it! Densely populated areas will usually have smaller yards. People who own a boat, RV or additional vehicles, might not have anywhere to put them! By turning your undeveloped lot into storage, you can collect several monthly rent payments with little overhead. Be sure to check your insurance and liability requirements.
Camping
If you own property in a rural and desirable area, find out what needs to be done to allow camping on the property. While you could choose to make improvements to the land, beneficial to campers, you could also choose to let people stay there as-is. We have a number of properties that would be perfect for this use!
Horses and Livestock
If your land is zoned agriculturally, you can choose to keep horses or livestock on the property. This has tax benefits as well. If owning animals isn’t your speed, you could lease to a breeder, providing a monthly income for you with little to no work.
Lease To Hunter or Farmer
If you own a large parcel and it is properly zoned, you could generate a passive income by leasing it to a hunter or farmer. This is actually relatively common as you can find people to use the land for a short period of time. Sometimes, leasing the land for one season to a local farmer can be very lucrative!
Events
This is a fabulous way to generate a passive income through real estate in Arizona! No matter where you live in the USA, there are likely traveling events that pop up near where you live. These events pay landowners to lease the space on a short-term basis. You will need to find out the permitting process, but you can use your land to host events such as circuses, Octoberfests, and carnivals. Pumpkin growers and Christmas tree farms can also look for land to sell their seasonal wares. Make sure you have solid contracts with these vendors, limiting your liability.
Make It Green(er)
With green technology popping up everywhere, landowners are using this to their advantage. For example, you could choose to install solar panels on the property, selling the energy back to the electric company for a profit each month.
When you’re ready to begin generating passive income through real estate in Arizona, you can rely on the professional investors at Southwest Land Deals to help guide you step-by-step to successful investments. And don’t forget to ask about the current inventory of the best investment properties available from Southwest Land Deals today in Arizona. Call Southwest Land Deals at 480-442-7787.